The Story of Becoming a Platform

Engaging an Organization on a Transformation Narrative: the real experience of Farfetch

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Working with organizations of all kinds that are seeking to embrace platform thinking to develop more resilient and sustainable business growth, we discovered that one of the main challenges that they have, is to understand how to integrate this vision in the whole company to accomplish the transformation, to engage everybody and succeed in this new strategy.

Earlier on in 2018, we started to collaborate with an amazing company that, during last year, also went through the inspiring but challenging moment of IPOing.

Farfetch is probably the biggest platform-marketplace in luxury fashion retail and is on a clear path to becoming an ecosystem-centric organization. This long term transformation is being instigated by a brilliant Platform Design Toolkit adopter and supporter, Yolanda Martin Olivas — Farfetch’s Director of Design, Service & Platform. Those of you that are following our steps more closely would surely remember Yolanda as one of the participants to our first Adopters Community webinar earlier on in 2018. In that occasion, we also featured Ron Kersic, another long-term member of our Community of Practice and one of the leaders of the platform transformation at ING Group. Ron, on this occasion, has been our interview host.

It was shortly after that conversation indeed that the idea came up to ask Ron to interview Yolanda to explore one particular aspect of a company’s embracement of platform thinking: building narratives of expanded opportunities that can motivate all the players of the company to align with the ecosystem-centric vision.

In Farfetch, Yolanda was indeed part of a horizontal team that managed — with very strict constraints — to catalyze a shared platform-ecosystem vision for a three thousand headcount company that is now further accelerating its transformation.

The interview we report here is pure gold for those that are currently working to scale a transformative message inside an organization — big or small — and generally thoroughly interesting for anyone involved in creating platform narratives that mobilize positive outcomes.

Some of the key topics:

• how a diverse and large organization can understand platform-ecosystem thinking in clear terms and with a clear vision;
• how to scale a platform narrative building inside complex organizations;
• where the core of resistance is going to show up in your organization for radical ecosystem-centric change;

Here follows the interview, lightly edited as we’ve added some comments to focus on important topics that emerge.

Becoming a Platform: Engaging an organization on a transformation narrative

The real experience of Farfetch

Ron Kersic: I’m so happy to actually have this conversation. We all stumbled on platform thinking, and we came across the Platform Design Toolkit. It shaped our professional and even personal position, but I think that your particular story, in terms of intensity and even success, is really worthwhile sharing.

Yolanda Martin Olivas: You flatter me, but I agree that we need to definitely share these stories of successes and failures because it enormously helps everybody that is, or will go through this. It’s a very difficult topic and to be honest I’m very glad we have this community where we can share the stories with everyone that is following this path. They all have to know that there is hope!

Ron: Could you share a bit on how it all started for you?

Yolanda: I joined Farfetch about a year ago, and I am currently working on the platform strategy that we are designing. I’ve had the chance to work on platform strategies already in different contexts. At Hearst Magazines we were successful but with a very different model: it was more about content sharing. We could say it was more about saving money than actually making money. It was an efficiency exercise of platforming.

When I arrived at Farfetch there was already a vision of integrating the current marketplace into a wider platform strategy, considering it the largest client of the platform and therefore the group accelerating the development of it. That idea was very much in the minds of company executives and architects. Not everybody shared that hard to understand vision: bringing it to life, making it relatable was a priority. Even if we agreed with it — and not everybody did — in general we didn’t know how to actually bring it to fruition. So I was part of a team that was hired a year and a half ago and we all together started to work to figure out how we were going to do this.

Ron: How did platform thinking take off at Farfetch?

Yolanda: I had already come across Platform Design Toolkit when I was working for Hearst and it helped me although I didn’t use it fully. I used parts of it and I adopted it very much to some specific needs of Hearst. This time, at Farfetch, I needed to train a team fast, so we decided to go to the public masterclass in Brussels and later we brought the steering team together in a dedicated team workshop: this accelerated enormously our work — the ramping up of the team into platform thinking was fantastic.

“People had the mentality but they didn’t know how to execute”

Even if my team and I went through platform thinking extremely fast — thanks to the Toolkit — after the first three, four months of struggling to get everybody to share the vision, I decided to bring everybody on a shared moment. We went to Rome because at the moment Simone couldn’t travel as he was having a baby(!). We called the Project, Project Rome — and we spent three days there roadmapping what we were going to do.

The key problem we focused on, was the vision: we discovered that this was hindering our growth into the adoption of platform thinking as none really knew what this transition was about. We worked on the vision and we were very convinced, but below the management group immediately involved, the rest of the company was oblivious to it.

They just heard the “platform” word around while in the meantime we had our IPO. Much of the IPO documentation was about the platform transition, which value we saw really clearly. The IPO went very well, the investors and the industry agreed that we were being evaluated so high because of our platform vision for the upcoming 10 years — we’ve been on the market for 10 years as a marketplace and now, our vision for the next 10 years was to become this tremendous platform.

So you know, everybody knew that this transition was important for the company but there was this “I carry on doing my job since this is not something that somebody else is going to take care of”.

We recognized that the first thing we had to do was to bring the work that we were doing on platforms to everyone. Anything — from entity profiles to the ecosystem mapping and so on. To instill it into daily use.

When you have a 3500 people company distributed in three continents and seven countries — it’s not huge but it’s big — it’s complicated and…. we had to do it before the end of the year(!)

We had less than a quarter to plan, organize and do the roadshow for 3000 people. The objective was extremely ambitious. We had this metric in mind: 90% of the company needs to understand Farfetch as a platform. 90% is a huge number considering the circumstances. So, with that ambitious goal, we started to prepare all the documentation and all the planning needed for this roadshow. Our CEO and execs were fully behind it. So we prepared emails and videos, expressing the importance of attending these 2 hours roadshow sessions. We were highly supported by the execs: having this kind of support is extremely important. Besides support, of course, the logistics challenge was enormous. We also had a content team envisioning how we would get to that confidence percentage of 90% of people having in mind what a platform is, in just two hours.

“A simple word but a complex concept”

As you well know a platform is a very simple word and a very complex concept. When you take a platform as core and you contextualize it in an ecosystem — trying to explain how ecosystem economies work — you have to explain what is the shaper role in that ecosystem, what is the governance, what is a learning engine. It suddenly becomes extremely complex. So we spend most of the time trying to figure out how far to go, what type of content and what steps to consider in the process.

We early understood that it couldn’t be two hours of PowerPoint, it had to be more participatory. We wanted to make people think beyond questions like: “what is a platform? What is an ecosystem?” but to actually understand the gain and the vision of Farfetch within it and, most importantly, ask “what does it mean for my job?”. If you’re a marketer or part of the legal or finance department or HR, the impacts are specific. If you don’t actually bring the conversation close to them, it looks like some alien thing that somebody else is going to care about. That was actually the hardest part.

We engaged with all the directors, gave them educational sessions and it all was very collaborative. We had a lot of sessions to ask: “okay if we’re spinning it like this, what are your questions? How you’re gonna apply it?”.

Together, we wrote an enormous Q&A document between all us.

We had a team of about 8 in total and we pulled 40 sessions over a month of a roadshow. It was remarkable! The content was changing every day. We were all collaborating on this live Q&A doc — adding things into decks. Our training department was of tremendous help to make these sessions more interactive. We created quizzes, games, physical props because we wanted to add hand-brain coordination to the experience. At the end of the day it was all about you, I mean: “we’re giving you all this information but we want you to tell us what this means to your daily context, how you’re gonna incorporate this on your everyday work”.

“Developing a shared narrative under pressure”

Ron: I would love to believe that all the constraints you had actually lead to the success you had. Isn’t it?

Yolanda: Absolutely, the team was incredibly smart but the fact that we were really concerned with people actually getting the best understanding — not just ticking a box in an OKR and say “we did this” — made a difference. It’s just the first of a 10-year program: the earlier the people get into the platform thinking, the fastest we are gonna go through this and the more progress we’re gonna do. We didn’t want it to be just like: “there you go, is one direction we’re telling this to you”, we wanted it to be completely collaborative.

By when we arrived at the actual roadshow — we did six different types of session for different groups (like Engineering, Operations and so on) — most of the questions that they would come up with, most of the doubts, were already addressed in the documentation.

A magnificent presentation can be completely brought to doubt if one question that somebody has, remains unanswered.

We had a questionnaire that everybody competed just at the end of the session — we didn’t want people to go to their desks and check the documentation and then answer — and our average success rate was around 85%. Paradoxically the teams we had more difficulties with, were the ones we didn’t really anticipate. We have put a lot of effort in understanding, for example how shift workers in the production facility could get this right. A production facility is very much like a manufacturing place: if the least digital workers of the company could get how they play a part into the larger platform economy of Farfetch we were good, we thought.

In the end, the deepest doubts came from those knowing very well how hard this transition is. Besides the beautiful view of how Platform and Ecosystems work seamlessly while people are gonna come and plug their businesses, there are teams within the company that know we have way to go. The road to being the Amazon Web Services of Luxury Retail is still a long one. We have always considered this a 10-year program.

I also think it was important — to reach everyone in the company — the fact that this was made somewhat compulsory. Some people went panicking like: “oh my God how are you going to take people out of work for two hours off in a super busy end of the year?”. I mean, trying to get people out of their jobs for two hours in the worst time of the year for a retailer — when it’s Black Friday, Christmas, Single’s day — it’s hard!

I don’t know how many people would have come otherwise: you very well know we are the nerds of the company — constantly banging on about the theory of platforms and ecosystems. So you know: if we had put out a poster saying “we’re gonna be talking about this, please come”, I’m not sure what would have happened. You need a wide buy-in from the board of the company. A transition towards platform-ecosystems economics, in already established companies, can hardly happen at the grassroots. It has to happen with the full support of the board.

“Addressing resistance and tailoring message”

Ron: I actually have exactly the same experience! The people or the organizational entities that seem to be the farthest away from what you think platforms are about, latch on it the strongest, and the people that are closest to the IT aspects of platforms for example — which one would assume would embrace platform thinking right away — they may indeed believe in the vision but also see the obstacles.

Yolanda: This is normal when you address such a large spectrum. We indeed reached around 2500 people in the end, some of them are coming back to us, asking more questions. We also created a booklet with deep information about the entities and ecosystem, and I see it everywhere on people’s desks.

I’ve seen slides that we created being used into other decks around the company in meeting rooms, and I have a little jolt of happiness whenever in a meeting room I see somebody presenting two or three of our slides. I think we have succeeded to drive the way now people talk about platforms: now people know what the platform is.

Now our responsibility seems to be about making it easier for them. We need to create more tools to support every area of the company. I think that with the right empathy, and the right understanding, we can offer more guidance and move forward.

“All of us are the platform”

Ron: You had to tailor this message but what that core message would be in a couple of sentences? I’m really curious.

Yolanda: It was all about this point: “all of us are the platform”. There’s been a lot of debate in Farfetch about the difference between the marketplace and the platform as they are different things. The marketplace in Farfetch was always identified with the Farfetch marketplace, which in the first ten years, has been the obsession of the company when talking about growth. Most of our revenues currently come from the marketplace since platform services started just recently.

Platform thinking is still small because it’s a new way of thinking business, but the main core message always was: “we have a platform”. We have APIs, platform services, data. We created B2B and B2C tools to serve our ecosystem. We have services attached to those tools for both sides, supply, and demand. We are now also open for third-party companies to come and provide their services through our platform: we don’t have to do all of this on our own. We will grow faster and we will be more successful if we accept all the amazing innovations coming from companies making anything from visual search to AI. Trying to do it all ourselves, it just doesn’t make any sense. That was one of the core central ideas.

“Farfetch as a city where we are all shapers”

Yolanda: When explaining what the ecosystem is, we often compare Farfetch to a city, and to planning how the communities and the people live in the city. As a planner you have to deal with the infrastructure, you have to care about the rules of law that manage the city and this is where we are: we supply the infrastructure — the electricity, the water supply, the road, the sewers …all of that — that allows these businesses to build on top and these communities to thrive within those.

The first ecosystem metaphor we used was a pond, in a garden. I always loved the idea that the platform designers are gardeners: putting up a few things and then hope for the best, for the plants to propagate. But when we did our first visual presentations to Directors it didn’t go well. People didn’t get it as much as when we started to talk about it as a city. This is because they always thought of themselves as the businesses part of the ecosystem: the merchants within the city. But this is not who we are: we are the urbanists, the designers, the mayor, the town hall and the police, we are the sewer managers: the least glamorous part maybe, of running an ecosystem. If we make a mistake designing the street management system, the city is not gonna flow correctly.

When you talk about the city infrastructure in general, it also helps you understand that there are so many different jobs that need to coexist together to make that infrastructure work.

This metaphor was very powerful: they really understood who we are. We are shapers and we are governors of an ecosystem. Yes, we also own businesses within it — because this is how we started — and we currently own the biggest business within the ecosystem. But what that business is doing is providing us with all the insights to actually architect better the rest of the ecosystem: we feel in our bones the pain of the flaws of the platform. We are the biggest client of it.

It doesn’t matter how amazing the infrastructure you have is: in an ecosystem, everything has to work together, everyone needs to connect with their motivation to contribute. You don’t only need a very successful tech infrastructure, or the “city” will become a ghost town. In some countries, this is happening — for example in Middle-East Asia— where they have built these amazing super tech cities, but nobody wants to live there. If you miss one part of the ecosystem or if you neglect an area of it — it will make everything else fall.

That was our main message: “you are all shapers”, every single one of you is a shaper of this platform.

Ron: The city metaphor in itself is really powerful. Especially with the fact, as you say: we own the biggest shop and that actually serves as a radar to understand what it means to actually be a commercial enterprise in our city-right?

Yolanda: Correct. We feel even the smallest nuances as big because of our volume of both supply and demand and traffic. We have huge traffic. We have a huge supply. We have a huge demand. So we’re the first ones to notice when the numbers fluctuate. If we’re having a problem at our level — the smaller ones are gonna to feel it very quickly as they live exactly the same situation. We are trying to mitigate those issues within our own marketplace and, in this way, helping everyone else within the ecosystem. It’s fantastic! I think it would be very difficult for any platform that doesn’t really own a business within to be able to react that fast.

Ron: That’s a really nice insight. One question now on another topic. The props you mentioned you used in your sessions, do they also tie into the city metaphor?

Yolanda: One of the things that we used it was a transition puzzle, going from the ecosystem idea of the city to a diagram of our own platform. We first introduced all the roles in the ecosystem — by parallels with the city — and then asked them to put the roles in the right places. After that, we went to ask them: “now… what’s your role? Where are you in all of this? Do you provide services? Are you a merchant? Are you a tenant or a producer?.

Obviously, everybody has been a consumer — they have bought something on Farfetch — and most of us are service providers, but then they really realized that we’ve one thing in common, as we are all shapers. Everyone: every idea, new feature, new tool we develop, or new algorithm we write works in harmony with the rest of the ecosystem.

We used the example of the Amazon engineer that realized that in off-peak times — after Black Friday or whatever — Amazon servers were unused and the personnel was wasting: that very expensive infrastructure was there sitting doing nothing. It was his memo saying we can make money out of renting this server space to other people while we are not using it that sparked one of the biggest companies in the world right now. That’s very powerful: shaping platforms comes from anywhere, it comes from people having problems and solving it for them and then solve it for everyone else.

Ron: Do you have any intentions — or maybe you already did — to take your message, and even format maybe, “outside”? To the people with the shops in your city so to speak?

Yolanda: We haven’t yet but in the spring we’ll have a gathering of all our tenants and merchants and we will do a presentation there. In the meanwhile, they have been informed about all the details of what we are doing, but we haven’t done anything related to the roadshow until now.

This transition is clearly not the easiest path to follow I have to say. Platform-ecosystems thinking is new, and difficult to grasp, but it’s so rewarding. It’s truly incredible to see what happens when people really get it and things start to move. How much innovation and growth happens in a company because of it. So to anybody out there trying to help their organization evolve in this direction: just keep on doing it, keep on persevering! 90% of this job is going to be talking to people and getting them to see the transition.

Conclusions & Take Aways

Commitment and perseverance are definitely some of the key aspects to succeed in your platform transformation journey. It won’t be an easy path but focused on what you want to achieve, the right mindset—you don’t have to do everything by yourself—and the support of the executives, the way will be easier for sure. As Yolanda said “There is Hope”

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Join us in one of our upcoming Masterclasses, check dates available on our website and reach out directly for private workshops, large groups, and remote training. We help companies envision the opportunity in the platform transition.

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City image: Ecology by lijunzhuang from Pixabay